Changelight to Enter InGaN Market

Unwilling to sit on the sidelines of the promising lighting chip market, China’s largest AlInGaP chip manufacturer Changelight has finally decided to enter InGaN LED epiwafer market.

Changelight’s board of trustees recently approved a plan that investigates the possibilities of investing in InGaN LED epiwafer during a board meeting on Feb. 25, 2014. The company board agreed to developing InGaN LED epiwafers and potential R&D. At the same time, the company departments were authorized by the board to implement related work.

One of the reason’s behind Changelight’s move is only a third of RGB LED in monitors use AlInGaP chips, the remaining two thirds consist of InGaN chips. If Changelight continues to be overtly focused on AlInGaP and not InGaN, it will be watching other InGaN manufacturers dividing up the market.

But the situation will be completely different if Changelight enters the InGaN market.

Changelight’s intention of entering the InGan market has become very obvious.

In April 2013, Changelight appeared to have drawn on its capital to allow Golden Eagle Technology (Samoa) (literal translation) to acquire 100% stock shares from Dongyuan Zhou Lei Technology (東莞洲磊電子有限公司).

However, the acquisition failed in the end. In Oct. 2013, Changelight announced it will terminate plans of acquiring Dongyuan Zhou Lei Technology.

At the same time, Changelight announced successful acquisition of Yangzhou Longyao Optoelectronic Technology Development Co. (Yangzhou Longyao), Ltd real estate, buildings and equipments in Yangzhou City’s economic development area in Jiangsu, China. Changelight acquired the company at RMB 75 million.

According to understanding, Yangzhou Longyao currently has six MOCVD equipments from Aixtron to make 31”-2 sized wafers. The equipment is mainly used to manufacture InGaN epiwafers.

Changelight has clearly shown with its acquisition of Yangzhou Longyao that it has shed behind previous uncertainties and is incisive about entering InGaN market.

An investigation of Changelight 2011 to present financial reports revealed the company’s epiwafer (including AlInGaN LED epiwafer, LED chips, triple-junction gallium arsenide (GaS) solar cells epiwafer, and other chips) gross margin have declined slightly. In 2011, the company epiwafer business reported 60.07% gross margin by 2012 it was down to 41.58%, and in 2013 an incremental decrease of 40.22%.

As for the company’s 2013 annual AlInGaP performance, Changelight’s recent financial report showed the company’s total revenue for 2013 was RMB 487 million, up 29.38% compared to the same period in 2012. Stockholders net profit was RMB 107 million, an incremental decline of 1.17% compared to the previous year.

LED chip market competition is expected to intensify in 2014, according to LEDinside. Compared to mainstream InGaN chip manufacturers 54 chip 10 MOCVDs, Changelight’s six Aixtron MOCVD production capacity of 31”-2 wafer equipments cannot really compete. It still needs to be observed as to how Changelight can quickly expand production capacity and gain greater market share.

(Author: Amber Liu, Reporter, LEDinside)

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